- 1 -

Note by the International Maritime Organization to the thirty-fifth session of the

Subsidiary Body for Scientific and Technical Advice (SBSTA 35)


Agenda item 9(a) - Emissions from fuel used for international aviation and
maritime transport


Technical and operational measures to improve the energy efficiency of
international shipping and assessment of their effect on future emissions


November 2011

































SUMMARY

J uly 2011 was marked by a breakthrough at IMO with the adoption of the first ever
global and legally binding climate deal for an industry sector. IMO adopted a new
chapter to Annex VI of the International Convention for the Prevention of Pollution
from Ships (MARPOL) that includes a package of mandatory technical and
operational measures to reduce GHG emissions from international shipping, with the
aim of improving the energy efficiency for ships through improved design and
propulsion techniques, as well as through improved operational practices. These
measures are expected to enter into force on 1 J anuary 2013.

This document by the IMO Secretariat provides detailed information on the specific
technical and operational energy efficiency measures adopted, the Energy Efficiency
Design Index (EEDI) and Ship Energy Efficiency Management Plan (SEEMP).
Background information by the IMO Secretariat on the development of regulatory
measures and associated technical policy and legal considerations related to control
of greenhouse gas emissions from international shipping can be found in a separate
complementary document.

In October 2011 IMO completed a study to estimate the CO
2
emission reductions
resulting from the adoption of mandatory technical and operational energy efficiency
measures for international shipping. A summary of the results from the study
is also provided.
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INTRODUCTION

1 International shipping is the most environmentally-friendly and energy efficient mode
of mass transport and only a modest contributor to the total volume of atmospheric emissions
while moving a considerable part of world trade (90%). Nevertheless, a global approach for
further improvements in energy efficiency and emission reduction is needed as sea transport
is predicted to continue growing significantly in line with world trade.

2 The International Maritime Organization (IMO), as the UNs Specialized Agency
responsible for the global regulation of all facets pertaining to international shipping, has a
key role in ensuring that the environment is not polluted by ships as summed up in IMOs
mission statement: Safe, Secure and Efficient Shipping on Clean Oceans.


TECHNICAL AND OPERATIONAL ENERGY EFFICIENCY MEASURES FOR SHIPS

3 In recent years, discussions at IMO have resulted in the development of technical
and operational measures for ships, the Energy Efficiency Design Index (EEDI) and the Ship
Energy Efficiency Management Plan (SEEMP), respectively, that have the broad and
emphatic support of Governments, industry associations and organizations representing civil
society interests. All are united in the same purpose: to ensure that the EEDI and SEEMP
deliver environmental effectiveness by generating, through enhanced energy efficiency
measures, significant reductions in GHG emissions from international shipping.

4 Numerous stakeholders policy-makers, shipowners, naval architects, class
societies, etc. are contributing to this endeavour, providing technical and other input to the
debate, leading to the development of an instrument that is eminently suited for its intended
purpose.

5 In October 2011 IMO completed a study to estimate the CO
2
emission reductions
resulting from the adoption of mandatory technical and operational energy efficiency
measures. The Executive Summary for the study is given at annex. The study indicates that
by 2020, about 150 million tonnes of annual CO
2
reductions are estimated from the
introduction of the EEDI for new ships and the SEEMP for all ships in operation, a figure that,
by 2030, will increase to 330 million tonnes of CO
2
annually. In other words, the average
reduction will, in 2020, be approximately 14% and, by 2030, approximately 23%, when
compared with business as usual. The reduction measures will also result in a significant
saving in fuel costs to the shipping industry, although these savings require deeper
investments in more efficient ships and more sophisticated technologies than the business
as usual scenario. The annual fuel cost saving estimate gives a staggering average figure of
US$50 billion by 2020, and an even more astonishing US$200 billion by 2030.

MANDATORY REGULATIONS ON ENERGY EFFICIENCY FOR SHIPS

6 Amendments to MARPOL Annex VI were adopted during MEPC 62 in J uly 2011
(resolution MEPC. 203(62)), adding a new chapter 4 to Annex VI on Regulations on energy
efficiency for ships to make mandatory the EEDI for new ships, and the SEEMP for all ships.
The regulations apply to all ships of 400 gross tonnage and above and are expected to enter
into force on 1 J anuary 2013. However, under regulation 19, an Administration may waive
the requirement for new ships of 400 gross tonnage and above from complying with the EEDI
requirements. This waiver may not be applied to ships above 400 gross tonnage for which
the building contract is placed four years after the entry into force date of chapter 4. The
amendments to MARPOL Annex VI represent the first ever mandatory global GHG regime
for an international industry sector or transport mode.
- 3 -


IMOS ENERGY EFFICIENCY DESIGN INDEX

7 Shipping is permanently engaged in efforts to optimize fuel consumption, e.g.,
through the development of more efficient engines and propulsion systems, optimized hull
designs and larger ships, and thereby achieve a noteworthy reduction in fuel consumption
and resulting CO
2
emissions on a capacity basis (tonne-mile). Although ships are the most
fuel efficient mode of mass transport, the Second IMO GHG Study 2009 identified a
significant potential for further improvements in energy efficiency mainly by the use of
already existing technologies. Additional improvements in hull, engine and propeller designs,
together with reduction in operational speed, may lead to considerable reductions as
illustrated in Table 1.

Table 1: Potential reductions of CO
2
emissions by using existing technology and practices
(Source: Second IMO GHG Study 2009)
DESIGN (New ships)
Saving of
CO
2
/tonne-mile
Combined Combined
Concept, speed and capability 2% to 50%
+

10% to 50%
+

25% to 75%
+

Hull and superstructure 2% to 20%
Power and propulsion systems 5% to 15%
Low-carbon fuels 5% to 15%
*

Renewable energy 1% to 10%
Exhaust gas CO
2
reduction 0%
OPERATION (All ships)
Fleet management, logistics and
incentives
5% to 50%
+

10% to 50%
+

Voyage optimization 1% to 10%
Energy management 1% to 10%
+
Reductions at this level would require reductions of operational speed.
*
CO
2
equivalent, based on the use of Liquefied Natural Gas (LNG).

8 The EEDI addresses improvements in energy efficiency by requiring a minimum
energy efficiency level for new ships; by stimulating continued technical development of all
the components influencing the fuel efficiency of a ship; and by separating the technical and
design-based measures from the operational and commercial ones. It is already being used
to enable a comparison to be made of the energy efficiency of individual ships with similar
ships of the same size that could have undertaken the same transport work (i.e. moved the
same cargo).

Applicability

9 The EEDI formula as presently drafted is not supposed to be applicable to all
ships. Indeed, it is explicitly recognized that it is not suitable for all ship types (particularly
those not designed to transport cargo) or for all types of propulsion systems (e.g., ships with
diesel-electric, turbine or hybrid propulsion systems will need additional correction factors).

10 Indeed, the first iteration of the EEDI has been purposefully developed for the
largest and most energy intensive segments of the world merchant fleet, thus embracing
70% of emissions from new ships and covering the following ship types: oil and gas tankers,
bulk carriers, general cargo ships, refrigerated cargo carriers and container ships. For ship
types not covered by the current formula, suitable formulae will be developed in due course
to address the largest emitters first. IMOs MEPC (Marine Environment Protection
Committee) is poised to consider the matter in detail at future sessions, with a view to
adopting further iterations of the EEDI.

- 4 -

Purpose of the EEDI

11 The Energy Efficiency Design Index for new ships creates a strong incentive for
further improvements in ships fuel consumption. The purpose of IMOs EEDI is:

.1 to require a minimum energy efficiency level for new ships;

.2 to stimulate continued technical development of all the components
influencing the fuel efficiency of a ship;

.3 to separate the technical and design based measures from the operational
and commercial measures (they will/may be addressed in other
instruments); and

.4 to enable a comparison of the energy efficiency of individual ships to similar
ships of the same size which could have undertaken the same transport
work (move the same cargo).

12 The EEDI establishes a minimum energy efficiency requirement for new ships
depending on ship type and size and is a robust mechanism to increase the energy efficiency
of ships step-wise for many decades to come. The EEDI is a non-prescriptive, performance-
based mechanism that leaves the choice of technologies to use in a specific ship design to
the industry. As long as the required energy efficiency level is attained, ship designers and
builders would be free to use the most cost-efficient solutions for the ship to comply with the
regulations. The reduction level in the first phase is set to 10% and will be tightened every
five years to keep pace with technological developments of new efficiency and reduction
measures. IMO has set reduction rates up to 2025 from when a 30% reduction is mandated
for most ship types calculated from a reference line representing the average efficiency for
ships built between 1999 and 2009 (Table 2).

Table 2: Reduction factors (in percentage) for the EEDI relative to the EEDI Reference line
Ship Type Size
Phase 0
1 J an 2013
31 Dec 2014
Phase 1
1 J an 2015
31 Dec 2019
Phase 2
1 J an 2020
31 Dec 2024
Phase 3
1 J an 2025
and onwards
Bulk Carrier
20,000 DWT and above 0 10 20 30
10,000 20,000 DWT n/a 0-10* 0-20* 0-30*
Gas carrier
10,000 DWT and above 0 10 20 30
2,000 10,000 DWT n/a 0-10* 0-20* 0-30*
Tanker
20,000 DWT and above 0 10 20 30
4,000 20,000 DWT n/a 0-10* 0-20* 0-30*
Container ship
15,000 DWT and above 0 10 20 30
10,000 15,000 DWT n/a 0-10* 0-20* 0-30*
General Cargo
ships
15,000 DWT and above 0 10 15 30
3,000 15,000 DWT n/a 0-10* 0-15* 0-30*
- 5 -


* Reduction factor to be linearly interpolated between the two values dependent upon vessel size.
The lower value of the reduction factor is to be applied to the smaller ship size.
n/a means that no required EEDI applies.

Implementation

13 The following circulars were issued (17 August 2009) following MEPC 59 and may
be found on the IMO website: www.imo.org:

.1 the EEDI formula was circulated as MEPC.1/Circ.681, Interim Guidelines
on the method of calculation of the Energy Efficiency Design Index for new
ships (annex 17 to MEPC 59/24);

.2 the EEDI verification procedure was circulated as MEPC.1/Circ.682, Interim
guidelines for voluntary verification of the EEDI (annex 18 to MEPC 59/24);

.3 the SEEMP was circulated as MEPC.1/Circ.683, Guidance for the
development of a SEEMP (annex 19 to MEPC 59/24); and

.4 the Energy Efficiency Operational Indicator (EEOI) was circulated as
MEPC.1/Circ.684, Guidelines for voluntary use of the ship EEOI (annex 20
to MEPC 59/24).

EEDI coverage

14 The EEDI is developed for the largest and most energy intensive segments of the
world merchant fleet and will embrace 70% of emissions from the applicable new ships.

The EEDI formula

15 The EEDI provides a specific figure for an individual ship design, expressed in
grams of CO
2
per ships capacity-mile (a smaller EEDI value means a more energy efficient
ship design) and calculated by the following formula based on the technical design
parameters for a given ship:

( )
w ref i
neff
i
ME FME i eff i eff AE FAE
nPTI
i
neff
i
i AEeff i eff i PTI
M
j
j AE FAE AE i ME i FME
nME
i
i ME
M
j
j
f V Capacity f
SFC C P f SFC C P f P f SFC C P SFC C P f

=

= =

=

=

=

|
|
.
|

\
|

|
|
.
|

\
|
|
|
.
|

\
|
+ - + |
.
|

\
|
|
|
.
|

\
|
[ [
1
) ( ) (
1 1
) ( ) ( ) (
1
) ( ) (
1
) (
1

That can be illustrated by the following simplified formula:

work transport
emission CO
EEDI
2
=

Ship Type Size
Phase 0
1 J an 2013
31 Dec 2014
Phase 1
1 J an 2015
31 Dec 2019
Phase 2
1 J an 2020
31 Dec 2024
Phase 3
1 J an 2025
and onwards
Refrigerated
cargo carrier
5,000 DWT and above 0 10 15 30
3,000 5,000 DWT n/a 0-10* 0-15* 0-30*
Combination
carrier
20,000 DWT and above 0 10 20 30
4,000 20,000 DWT n/a 0-10* 0-20* 0-30*
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16 The CO
2
emission represents total CO
2
emission from combustion of fuel, including
propulsion and auxiliary engines and boilers, taking into account the carbon content of the
fuels in question. If shaft generators or innovative mechanical or electrical energy efficient
technologies are incorporated on board a ship, these effects are deducted from the total CO
2

emission. The energy saved by the use of wind or solar energy will also is deducted from the
total CO
2
emissions, based on actual efficiency of the systems. For technologies for EEDI
reduction please refer to Table 3.

Table 3: Technologies for EEDI reduction
No. EEDI reduction measure Remark
1 Optimised hull dimensions and form
Ship design for efficiency via choice of main dimensions (port
and canal restrictions) and hull forms.
2 Lightweight construction New lightweight ship construction material.
3 Hull coating Use of advanced hull coatings/paints.
4 Hull air lubrication system
Air cavity via injection of air under/around the hull to reduce wet
surface and thereby ship resistance.
5
Optimisation of propeller-hull
interface and flow devices
Propeller-hull-rudder design optimisation plus relevant changes
to ships aft body.
6 Contra-rotating propeller Two propellers in series; rotating at different direction.
7 Engine efficiency improvement
De-rating, long-stroke, electronic injection, variable geometry
turbocharging, etc.
8 Waste heat recovery
Main and auxiliary engines exhaust gas waste heat recovery
and conversion to electric power.
9 Gas fuelled (LNG) Natural gas fuel and dual fuel engines.
10
Hybrid electric power and
propulsion concepts
For some ships, the use of electric or hybrid would be more
efficient.
11
Reducing on-board power demand
(auxiliary system and hotel loads).
Maximum heat recovery and minimising required electrical loads
flexible power solutions and power management.
12
Variable speed drive for pumps,
fans, etc.
Use of variable speed electric motors for control of rotating flow
machinery leads to significant reduction in their energy use.
13 Wind power (sail, wind engine, etc.)
Sails, fletnner rotor, kites, etc. These are considered as
emerging technologies.
14 Solar power Solar photovoltaic cells.
15
Design speed reduction (new
builds)
Reducing design speed via choice of lower power or de-rated
engines.

17 The transport work is calculated by multiplying the ships capacity as designed with
the ships design speed measured at the maximum design load condition and at 75% of the
rated installed shaft power. Speed is the most essential factor in the formula and may be
reduced to achieve the required index.

Safe Speed

18 The need for a minimum speed to be incorporated into the EEDI formula has been
duly acknowledged by the MEPC and, to that end, regulation 21.5 states that For each ship
to which this regulation applies, the installed propulsion power shall not be less than the
propulsion power needed to maintain the manoeuvrability of the ship under adverse
conditions, as defined in the guidelines to be developed by the Organization.

19 It should, therefore, be clear that IMO fully supports the view that a minimum
installed power to maintain safe navigation in adverse weather conditions is of critical
importance to ensure both the safety and efficiency of international shipping. While the EEDI
instrument therefore contains the standard to be achieved on this matter, implementation of
that standard will be enabled through guidelines that are also to be adopted. With technical
input from all concerned parties, these guidelines will be further developed. A draft set of
such guidelines will be considered for adoption by the MEPC in March 2012.
- 7 -


Installed Power

20 Although the easiest way to improve a ships fuel efficiency is, indeed, to reduce
speed hence the move to slow steaming by a significant number of ships there is a
practical minimum at which fuel efficiency will decrease as a ship is slowed down further.
There are other ways to improve fuel efficiency, such as waste heat generators, which do not
impact on speed (they impact on auxiliary engines). Indeed, improvements in road transport
efficiency have been made through advances in technology that have, however, not led to a
sacrifice in speed; rather, quite the opposite.

21 It has been (wrongly) argued that the EEDI limits installed power and so induces
owners to use small-bore high-rpm engines, thereby increasing fuel consumption. However,
a reduction of installed power does not require a reduction in engine bore and increasing
rpm. The easiest way to reduce power would be to de-rate the exact same engine by
limiting the maximum rpm (remember, horsepower =torque multiplied by rpm). This would
have the impact of increasing propeller efficiency (if the exact same propeller is installed), as
propeller efficiency will generally improve as rpm decreases. Another practical way to
reduce installed horsepower is to install an engine with one cylinder fewer. This would have
no impact on specific fuel consumption or rpm. Such engines can be identified by reference
to the catalogues of major engine manufacturers.

22 Of course, there are economies of scale in ships fuel efficiency. The larger the
ship is (at a given speed), the lower the fuel consumption per unit of cargo. However, such
economies of scale are limited by trade considerations, physical port limitations (generally,
draft) or cargo logistics issues. Therefore, ships tend to be designed to be as large as
practical for a given trade.

Status of the EEDI

23 As stated in paragraph 13 (Implementation), the EEDI was circulated in August 2009
for trial purposes to ensure its feasibility and for further improvement of the calculation
method. The regulatory text introducing the EEDI as a mandatory measure for all new ships
under MARPOL Annex VI was adopted by Parties to MARPOL Annex VI in J uly 2011. The
amendments to MARPOL Annex VI are expected to enter into force on 1 J anuary 2013.

Future developments

24 The EEDI formula is not applicable to all ship types e.g., Ro-Ro ships, or all types of
propulsion systems, e.g., ships with diesel-electric, turbine or hybrid propulsion systems will
need additional correction factors, and MEPC will consider the matter in detail at future
sessions.

Conclusions EEDI

25 The EEDI establishes a minimum energy efficiency requirement for new ships
depending on ship type and size and is a robust mechanism that may be used to increase
the energy efficiency of ships stepwise to keep pace with technical developments for many
decades to come. The EEDI is a non-prescriptive mechanism that leaves the choice of what
technologies to use in a ship design to the stakeholders as long as the required energy
efficiency level is attained enabling the most cost-efficient solutions to be used.

26 Introduction of the EEDI as a mandatory measure for all ships will mean, provided it
enters into force as expected on 1 J anuary 2013; that between 31 and 42 million tonnes of
CO
2
will be removed from the atmosphere annually by 2020 compared with business as
- 8 -

usual depending on the growth in world trade. For 2030, the reduction will be between 155
and 224 million tonnes annually from the introduction of the EEDI. By 2050, the estimated
annual reductions are 603 and 995 million tonnes of CO2 respectively.

Verification of the EEDI

27 Regulation 20 of the regulatory text requires the attained EEDI for a new ship to be
verified. Guidelines on verification of the EEDI are to be considered for adoption at MEPC in
March 2012 to assist verifiers (ship surveyors) of the EEDI in conducting the verification in a
uniform manner. The guidelines will also assist shipowners, shipbuilders as well as engine
and equipment manufacturers, and other interested parties, in understanding the procedures
of EEDI verification.

Verification in two stages

28 The attained EEDI should be calculated in accordance with the EEDI calculation
Guidelines. EEDI verification should be conducted on two stages: preliminary verification at
the design stage, and final verification at the sea trial, before issuance of the final report on the
verification of the attained EEDI. The basic flow of the verification process is presented in
Figure 1.


Figure 1: Basic flow of verification process

Preliminary verification at the design stage

29 For the preliminary verification at the design stage, a shipowner should submit to a
verifier (e.g., a Maritime Administration or a Classification Society) an application for the
verification and an EEDI Technical File containing the necessary information for the
verification and other relevant background documents as required by the guidelines.

- 9 -

Final verification of the Attained EEDI at sea trial

30 Prior to the sea trial, a shipowner should submit the application for the verification of
the EEDI together with the final displacement table and the measured lightweight, as well as
other technical information as necessary. The verifier should attend the sea trial and confirm
compliance in accordance with the guidelines and the EEDI guidelines.

Issuance of the EEDI verification report

31 The verifier should issue the Report on the Preliminary Verification of EEDI after it
has verified the Attained EEDI at design stage in accordance with the guidelines. Following
the sea trial, the verifier should issue the final report on the verification of the attained EEDI
after it has verified the Attained EEDI at the sea trial in accordance with the guidelines.

Status of the verification guidelines

32 The guidelines are to be applied to new ships for which an application for EEDI
verification has been submitted to a verifier, and form part of the regulatory framework
governing the scheme.

IMOS SHIP ENERGY EFFICIENCY MANAGEMENT PLAN

33 The amendments to MARPOL Annex VI require that all international ships over 400
gross tonnage retain on-board a Ship Energy Efficiency Management Plan (SEEMP).
Guidance for the development of a SEEMP is contained in IMO circular MEPC.1/Circ.683.

34 The purpose of the SEEMP is to establish a mechanism for a company and/or a
ship to improve the energy efficiency of ship operations. Preferably, the ship-specific
SEEMP is linked to a broader corporate energy management policy for the company that
owns, operates or controls the ship. It should be recognized that the international fleet of
merchant vessels comprises a wide range of ship types and sizes that differ significantly in
their design and purpose, and that ships operate under a broad variety of different
conditions.

35 Sea transport has a justifiable image of conducting its operations in an energy
efficient way, and in a manner that creates little impact on the global environment. It is
nevertheless the case that enhancement in efficiencies can reduce fuel consumption, save
money, and decrease the environmental impacts from ships. While the yield of individual
measures may be small, the collective effect across the entire fleet will be significant. In
global terms it should be recognized that operational efficiencies delivered by a large number
of ships will make a valuable contribution to reducing global carbon emissions.

Practical approach

36 Mandatory management plans are used to regulate a range of ship operations
where traditional command and control regulations would not work, and is also the chosen
option for reduction of GHG emissions from the operation of ships engaged in international
trade. To regulate ship operations by traditional prescriptive regulations (as is the customary
practice for technical regulations) is not feasible, e.g., to determine the most energy efficient
speed, optimum ship handling practices or the preferred ballast conditions for all ships in a
set of regulations could hardly be done and keeping it updated would not be possible. A
management plan is a familiar tool for the shipping industry and provides a flexible
mechanism where shipowners and operations can choose the most cost-effective solutions
for their ships and their operations.

- 10 -

37 The SEEMP provides an approach for monitoring ship and fleet efficiency
performance over time and forces the responsible persons and entities to consider new
technologies and practices when seeking to optimize the performance of the ship (see
Table 4 for SEEMP related measures). The Second IMO GHG Study 2009 indicates that a
20% reduction on a tonne-mile basis by mainly operational measures is possible and would
be cost-effective even with the current fuel prices, and the SEEMP will assist the shipping
industry in achieving this potential.

Table 4: SEEMP related measures
No. Energy Efficiency Measure Remark
1 Engine tuning and monitoring
Engine operational performance and condition
optimisation.
2 Hull condition Hull operational fouling and damage avoidance.
3 Propeller condition Propeller operational fouling and damage avoidance.
4 Reduced auxiliary power
Reducing the electrical load via machinery operation and
power management.
5 Speed reduction (operation) Operational slow steaming.
6 Trim/draft Trim and draft monitoring and optimisation.
7 Voyage execution
Reducing port times, waiting times, etc. and increasing
the passage time, just in time arrival.
8 Weather routing
Use of weather routing services to avoid rough seas and
head currents, to optimize voyage efficiency.
9 Advanced hull coating Re-paint using advanced paints.
10
Propeller upgrade and aft body
flow devices
Propeller and after-body retrofit for optimisation. Also,
addition of flow improving devices (e.g. duct and fins).

38 The IMO circular MEPC.1/Circ.683 provides guidance for the development of a
SEEMP that should be adjusted to the characteristics and needs of individual companies and
ships. The SEEMP is a management tool to assist a company in managing the ongoing
environmental performance of its vessels and, as such, it is recommended that the plan be
implemented in a manner which limits any onboard administrative burden to the minimum
necessary.

Ship-specific plan

39 The SEEMP should be developed as a ship-specific plan by the shipowner, operator
or any other party concerned, e.g., the charterer. The SEEMP seeks to improve a ships
energy efficiency through four steps: planning, implementation, monitoring, and
self-evaluation and improvement. These components play a critical role in the continuous
cycle to improve ship energy management.

Status of the SEEMP

40 The regulatory text introducing the SEEMP as a mandatory measure for all ships
under MARPOL Annex VI was adopted by Parties to MARPOL Annex VI in J uly 2011. The
amendments to MARPOL Annex VI are expected to enter into force on 1 J anuary 2013.

Guidance on best practices for fuel-efficient operation of ships

41 The above mentioned IMO circular also contains guidance on best practices related
to voyage performance, optimized ship handling, hull and propulsion system maintenance,
the use of waste heat recovery systems, improved fleet management, improved cargo
handling and energy management. It also covers areas such as fuel types, compatibility of
measures, age and operational service life of a ship as well as trade and sailing area.

- 11 -

42 Industry has also begun to develop model plans based on experience. The Oil
Companies International Marine Forum (OCIMF) have produced a model SEEMP and
submitted it to IMO for information in document MEPC 62/INF.10.

THE ENERGY EFFICIENCY OPERATIONAL INDICATOR

43 Improvements in energy efficiency are possible by operational measures, such as
fleet management, voyage optimization and energy management, with 10 to 50% reductions
of CO
2
emissions (on a capacity mile basis) estimated through the combined use of these
measures. Saving energy at the operational stage is presently addressed by the SEEMP
and the EEOI can be used as a monitoring tool and to establish benchmarks for different ship
segments of the world fleet categorized by ship type and size.

Purpose of the EEOI

44 Guidelines for voluntary use of the ship EEOI have been developed to establish a
consistent approach for measuring ships energy efficiency at each voyage or over a certain
period of time, which will assist shipowners and ship operators in the evaluation of the
operational performance of their fleet. As the amount of CO
2
emitted from ships is directly
related to the consumption of bunker fuel oil, the EEOI can also provide useful information on
a ships performance with regard to fuel efficiency.

45 The EEOI enables continued monitoring of individual ships in operation and thereby
the results of any changes made to the ship or its operation. The effect of retrofitting a new
and more efficient propeller would be reflected in the EEOI value and the emissions
reduction could be quantified. The effect on emissions by changes in operations, such as
introduction of just in time planning or a sophisticated weather routing system, will also be
shown in the EEOI value.

EEOI coverage

46 The EEOI can be applied to almost all ships (new and existing) including passenger
ships, however it cannot be applied to ships that are not engaged in transport work, such as
service and research vessels, tug boats or FPSOs, as it is the transport work that is the input
value together with emissions (fuel consumed x CO
2
factors for different fuel types).

The EEOI formula

47 The EEOI provides a specific figure for each voyage. The unit of EEOI depends on
the measurement of cargo carried or the transport work done, e.g., tonnes
CO
2
/(tonnesnautical miles), tonnes CO
2
/(TEUnautical miles) or tonnes CO
2
/(personnautical
miles), etc. The EEOI is calculated by the following formula, in which a smaller EEOI value
means a more energy efficient ship:

work transport performed
emission CO actual
EEOI
2
=

48 The actual CO
2
emission represents total CO
2
emission from combustion of fuel on
board a ship during each voyage, which is calculated by multiplying total fuel consumption for
each type of fuel (distillate fuel, refined fuel or LNG, etc.) with the carbon to CO
2
conversion
factor for the fuel(s) in question (fixed value for each type of fuel).

- 12 -

49 The performed transport work is calculated by multiplying mass of cargo (tonnes,
number of TEU/cars, or number of passengers) with the distance in nautical miles
corresponding to the transport work done.

Status of the EEOI

50 The EEOI is circulated to encourage shipowners and ship operators to use it on a
voluntary basis and to collect information on the outcome and experiences in applying it.
The EEOI will be used as a monitoring tool in the SEEMP and to establish benchmarks.

51 A sample form of a SEEMP is presented below for illustrative purposes.

Name of Vessel: GT:
Vessel Type: Capacity:
Date of
Development:
Developed by:
Implementation
Period:
From:
Until:
Implemented by:
Planned Date of
Next Evaluation:


1 Measures

Energy
Efficiency
Measures
Implementation
(including the starting date)
Responsible Personnel
Weather
Routeing
<Example>
Contracted with [Service providers] to
use their weather routeing system and
start using on trial basis as of
1 J uly 2012.
<Example>
The master is responsible for
selecting the optimum route
based on the information provided
by [Service providers].
Speed
Optimization
While the design speed (85% MCR) is
19.0 kt, the maximum speed is set
at 17.0 kt as of 1 J uly 2012.
The master is responsible for
keeping the ship speed. The
log-book entry should be checked
every day.

2 Monitoring

- Description of monitoring tools (e.g. the EEOI, or another suitable
indicator or MRV tool)

3 Goal

- Measurable goals

4 Evaluation

- Procedures of evaluation

MODEL COURSE FOR ENERGY EFFICIENT OPERATION SHIPS

52 At MEPC 60 the Committee noted that, to assist in achieving the visions and goals
set out in resolution A.947(23) on the Human Element Vision, Principles and Goals for the
Organization, and the principles and aims of resolution A.998(25) on the Need for
capacity-building for development and implementation of new and amendments to existing,
- 13 -

instruments, the IMO Secretariat had engaged the World Maritime University (WMU) to
develop a draft model course on energy efficient operation of ships.

53 A draft Model Course was submitted to MEPC 62 as document MEPC 62/INF.39. It
was developed on the elements comprising the SEEMP as agreed at MEPC 59
(MEPC 59/24, annex 19) as well as on the Guidance for the development of a SEEMP as
agreed and contained in MEPC.1/Circ.683. This draft model course provides general
background on the climate change issue and IMOs related work and aims at building the
different operational and technical tools into a manageable course programme, which will
promulgate best practice throughout all sectors of the industry. The Course will help create
benchmarks against which operators can assess their own performance.

54 The Committee agreed that the draft model course was an excellent start to
providing a structured training course but that it required additional work to identify the
relevant parts and information, such as key practical operational efficiency measures, which
are pertinent to the ships deck and engineering officers. The Committee also considered
important that consideration be given to integration of the SEEMP into the on board safety
management system. In light of the improvements necessary to the Model Course, the
Committee invited interested delegations to provide practical information and examples on
the efficient operation of ships to the Secretariat by 31 August 2011 for inclusion in the IMO
Model Course. The draft Model Course will be published in November 2011.

55 The purpose of the IMO model courses is to assist training providers and their
teaching staff in organizing and introducing new training courses, or in enhancing, updating
or supplementing existing training material, so that the quality and effectiveness of the
training courses may thereby be improved.

ASSESSMENT OF CO
2
EMISSION REDUCTIONS RESULTING FROM THE INTRODUCTION OF
TECHNICAL AND OPERATIONAL ENERGY EFFICIENCY MEASURES FOR SHIPS

56 Following the adoption of mandatory energy efficiency measures for ships, IMO
commissioned a study (completed in October 2011) by Lloyd's Register and DNV on
estimated CO
2
emission reductions associated with the mandatory technical and operational
measures The full study can be found in IMO document MEPC 63/INF.2.

57 The study indicates that the adoption by IMO of mandatory reduction measures for
all ships from 2013 and onwards will lead to significant emission reductions and also a
striking cost saving for the shipping industry. By 2020, about 150 million tonnes of annual
CO
2
reductions are estimated from the introduction of the EEDI for new ships and the
SEEMP for all ships in operation, a figure that, by 2030, will increase to 330 million tonnes of
CO
2
annually. In other words, the average reduction will in 2020 be approximately 14%, and
by 2030 approximately 23%, when compared with business as usual. The reduction
measures will also result in a significant saving in fuel costs to the shipping industry, although
these savings require deeper investments in more efficient ships and more sophisticated
technologies than the business as usual scenario. The annual fuel cost saving estimate
gives a staggering average figure of US$50 billion by 2020, and even more astonishing
US$200 billion by 2030.

FUTURE ACTIVITY

58 The new chapter 4 to MARPOL Annex VI also includes a regulation on Promotion of
technical co-operation and transfer of technology relating to the improvement of energy
efficiency of ships, which requires Administrations, in co-operation with IMO and other
international bodies, to promote and provide, as appropriate, support directly or through IMO
to States, especially developing States, that request technical assistance. It also requires
- 14 -

the Administration of a Party to co-operate actively with other Parties, subject to its national
laws, regulations and policies, to promote the development and transfer of technology and
exchange of information to States, which request technical assistance, particularly
developing States, in respect of the implementation of measures to fulfil the requirements of
Chapter 4.

59 In advance of entry into force of the foregoing regulatory provisions, IMO is already
providing technical assistance to developing countries for the transition to energy effient
shipping. A programme funded by the Republic of Korea is providing such support in Asia
while further interventions, funded by IMO itself and other donours, will follow in other
regions.

60 MEPC 62 also agreed on a work plan and schedule for further development of the
remaining EEDI and SEEMP related guidelines, EEDI framework for ship types and sizes
and propulsion systems not covered by the current EEDI requirements. For this purpose,
MEPC 62 agreed to terms of reference for an intersessional working group meeting on
energy efficiency measures for ships that will take place in J anuary 2012. The intersessional
working group meeting should report to MEPC 63 in February/March 2012 and is tasked
with:

.1 further improving, with a view to finalization at MEPC 63,

.1 draft Guidelines on the method of calculation of the EEDI for new
ships;

.2 draft Guidelines for the development of a SEEMP;

.3 draft Guidelines on Survey and Certification of the EEDI; and

.4 draft interim Guidelines for determining minimum propulsion power
and speed to enable safe manoeuvring in adverse weather
conditions.

.2 considering the development of EEDI frameworks for other ship types and
propulsion systems not covered by the draft Guidelines on the method of
calculation of the EEDI for new ships;

.3 identifying the necessity of other guidelines or supporting documents for
technical and operational measures;

.4 considering the EEDI reduction rates for larger tankers and bulk carriers;
and

.5 considering the improvement of the guidelines on the Ship Energy
Efficiency Operational Indicator (EEOI) (MEPC.1/Circ.684).



***


- 15 -

ANNEX 1



ASSESSMENT OF IMO MANDATED ENERGY EFFICIENCY
MEASURES FOR INTERNATIONAL SHIPPING


ESTIMATED CO
2
EMISSIONS REDUCTION FROM INTRODUCTION OF MANDATORY
TECHNICAL AND OPERATIONAL ENERGY EFFICIENCY MEASURES FOR SHIPS


EXECUTIVE SUMMARY OF THE PROJECT FINAL REPORT


















Report Authors:
Zabi Bazari, Lloyds Register, London, UK
Tore Longva, DNV, Oslo, Norway

Date of report:
31 October 2011



- 16 -

Executive Summary


1 This study was commissioned by the International Maritime Organization (IMO) to
analyse the potential reduction resulting from the mandated energy efficiency regulations on
EEDI and SEEMP as finalised at MEPC 62 in J uly 2011 and also to estimate the projected
reduction in CO
2
emissions from international shipping for every year up to year 2050
resulting from these agreed measures, using a number of scenarios.

2 This Study was undertaken by Lloyds Register (LR) in partnership with Det Norske
Veritas (DNV). Dr. Zabi Bazari (LR) and Mr. Tore Longva (DNV) were the main contributors
to the report. They additionally received assistance from colleagues within their
organizations.

3 Mandatory measures to reduce greenhouse gas (GHG) emissions from international
shipping were adopted by Parties to MARPOL Annex VI represented in the Marine
Environment Protection Committee (MEPC) of the International Maritime Organization (IMO),
when it met for its 62nd session from 11 to 15 J uly 2011 in London, representing the first
ever mandatory global GHG reduction regime for an international industry sector.

4 The amendments to MARPOL Annex VI - Regulations for the prevention of air
pollution from ships, add a new chapter 4 to Annex VI on Regulations on energy efficiency
for ships to make mandatory the Energy Efficiency Design Index (EEDI) for new ships, and
the Ship Energy Efficiency Management Plan (SEEMP) for all ships. Other amendments to
Annex VI add new definitions and the requirements for survey and certification, including the
format for the International Energy Efficiency Certificate. The regulations apply to all ships of
400 gross tonnage and above, and are expected to enter into force internationally through
the tacit acceptance procedure on 1 J anuary 2013.

Table i EEDI reduction factors, cut off limits and implementation phases

5 The EEDI requires a minimum energy efficiency level (CO
2
emissions) per capacity
mile (e.g. tonne mile) for different ship type and size segments (Table i). With the level being
tightened over time, the EEDI will stimulate continued technical development of all the
components influencing the energy efficiency of a ship. Reduction factors are set until 2025
when a 30% reduction is mandated over the average efficiency for ships built between 1999
and 2009. The EEDI has been developed for the largest and most energy intensive
segments of the world merchant fleet and will embrace about 70% of emissions from new oil
and gas tankers, bulk carriers, general cargo, refrigerated cargo and container ships as well
as combination carriers (wet/dry bulk). For ship types not covered by the current EEDI
- 17 -

formula, suitable formulas are likely to be developed in the future according to work plan
agreed at MEPC 62.

6 The SEEMP establishes a mechanism for a shipping company and/or a ship to
improve the energy efficiency of ship operations. The SEEMP provides an approach for
monitoring ship and fleet efficiency performance over time using, for example, the Energy
Efficiency Operational Indicator (EEOI) as a monitoring and/or benchmark tool. The SEEMP
urges the ship owner and operator at each stage of the operation of the ship to review and
consider operational practices and technology upgrades to optimize the energy efficiency
performance of a ship.

7 In this study, scenario modelling was used to forecast possible worlds fleet CO
2

emission growth trajectories to 2050. The scenarios included options for fleet growth, EEDI
and SEEMP uptake, fuel price and EEDI waiver. Table ii shows the combined scenarios
modelled in this Study.

8 A model, designed specifically to account for the uptake of emission reduction
technologies and measures and the implementation of regulations to control emissions, has
been used to predict likely CO
2
emission levels to 2050. The model keeps track of the year of
build for all ships, and scraps the oldest and least energy efficient ships first. By including
the scrapping rate, the renewal rate of the fleet is taken into account. A methodology was
used to determine the impact of future EEDI regulatory limits on various ships based on the
level of spread (expressed by the standard deviation) of EEDI values for the current fleet
reference lines.

Scenario IPCC growth
scenario
EEDI
Uptake
scenario
SEEMP
uptake
Fuel
price
scenarios
Waiver
scenario
A1B-1 A1B Regulation Low* Reference 5%
A1B-2 A1B Regulation Low High 5%
A1B-3 A1B Regulation High** Reference 5%
A1B-4 A1B Regulation High High 5%
B2-1 B2 Regulation Low Reference 5%
B2-2 B2 Regulation Low High 5%
B2-3 B2 Regulation High Reference 5%
B2-4 B2 Regulation High High 5%
A1B-3W A1B Regulation High Reference 30%
* 30% ** 60%
Table ii Combined scenarios

9 Based on scenarios modelled in this Study, results shows that the adoption by IMO
of mandatory reduction measures from 2013 and onwards will lead to significant emission
reductions by the shipping industry (see Figure i).





- 18 -

Figure i Overall annual CO
2
reduction potential for SEEMP and EEDI (waiver 5%)

Findings

10 According to Figure i:

.1 By 2020, an average of 151.5 million tonnes of annual CO
2
reductions are
estimated from the introduction of the EEDI for new ships and the SEEMP
for all ships in operation, a figure that by 2030, will increase to an average
of 330 million tonnes annually (Table iii, showing the average for scenarios
A1B-4 and B-2);

Year

BAU
Mill tonnes

Reduction
Mill tonnes

New level
Mill tonnes
2020 1103 152 951
2030 1435 330 1105
2040 1913 615 1299
2050 2615 1013 1602
Table iii - Estimated average CO
2
emission reductions (million tonnes) for world fleet
compared with estimated BAU CO
2
emissions (million tonnes)

.2 Compared with Business as Usual (BAU), the average annual reductions in
CO
2
emissions and fuel consumed are estimated between 13% and 23%
by 2020 and 2030 respectively (Tables iii);

.3 CO
2
reduction measures will also result in a significant reduction in fuel
consumption (Table iv) leading to a significant saving in fuel costs to the
shipping industry, although these savings require deeper investments in
more efficient ships and more sophisticated technologies, as well as new
practices, than the BAU scenario.
- 19 -


Year 2020 2030
Scenarios

Low (B2-1)
Mill tonnes

High (A1B-4)
Mill tonnes

Low (B2-1)
Mill tonnes

High (A1B-4)
Mill tonnes
BAU fuel
consumption
340 390 420 530
Reduction in fuel
consumption
30 70 80 140
New fuel
consumption
level
310 320 340 390
Table iv - Annual fuel consumption reduction (in million metric tonnes) for world fleet

.4 The average annual fuel cost saving is estimated between US$20 and
US$80 billion (average US$50 billion) by 2020, and between US$90 and
US$310 billion (average US$200 billion) by 2030 (Table v).

High (A1B-4) Low (B2-1)
Year
2020
$billion
2030
$billion
2020
$billion
2030
$billion
BAU fuel cost 490 1170 240 510
Reduction in fuel cost 80 310 20 90
New fuel cost level 410 860 220 420
Table v - Annual fuel cost reduction (in billion US$) for world fleet

11 The results of the study indicate that SEEMP measures (mainly operational) have
an effect mostly in the medium term (e.g. 2020) whilst EEDI measures (technical) should
have significant impact on the long term (e.g., 2030) as fleet renewal takes place and new
technologies are adopted; however, none of the scenarios modelled will achieve a reduction
in total CO
2
level relative to year 2010 (Figure ii).

















Figure ii - Annual emission reduction by 2050 and new emissions levels (average of
A1B-4 and B2-1 scenarios)

- 20 -

Concluding remarks

12 Based on the results of this Study, the following conclusions may be made:

.1 Significant potential for reduction of CO
2
emissions from ships due to EEDI
and SEEMP regulations is foreseen to 2050 with emission reduction due to
SEEMP (primarily operational measures) likely to be realised more rapidly
than that for EEDI (primarily technical measures), as the effect of EEDI will
occur only as and when older, less efficient, tonnage is replaced by new,
more efficient tonnage.

.2 The existing mandatory application of EEDI will drive more energy efficient
ship design and realise the CO
2
emission reduction potential associated
with technical innovation and the use of lower or no carbon fuels.
Calculations made within this Study suggest that the existing limits to the
EEDI can be achieved via technological developments and some design
speed reduction as highlighted in this report.

.3 Forecasts with different scenarios indicate total annual CO
2
emissions in
2050 of 3215 million tonnes for BAU and new emissions level of 1895
million tonnes (1320 million tonnes reduced) for scenario A1B-4 (high
growth combined with high SEEMP uptake and high fuel price) and a total
annual CO
2
emissions in 2050 of around 2014 million tonnes for BAU and
new emissions level of 1344 million tonnes (706 million tonnes reduced) for
scenario B2-1 (low growth combined with low SEEMP uptake and
reference fuel price).

.4 For EEDI, an annual reduction of about 1000 million tonnes of CO
2
for A1B
scenario and 600 million tonnes of CO
2
for B2 scenario is foreseen in 2050.
For SEEMP, an annual reduction of about 325 million tonnes of CO
2
for
A1B-4 scenario and 103 million tonnes of CO
2
for B2-1 scenario is foreseen
by 2050.

.5 The transport efficiency will improve with the same rate as the emission
reduction taking into account the growth rate of the fleet. Table vi provides
the transport efficiency development for different ship types under the
modelled scenarios. As indicated, various vessels transport energy
efficiency nearly doubles and the emissions per cargo unit nearly halves
from 2005 to 2050.

Year Bulk carrier Gas tanker Tanker
Container
ship
General
cargo ship
Refrigerated
cargo carrier
2005 9 13 13 30 40 40
2010 9 12 12 28 37 37
2020 8 10 10 23 30 30
2030 7 9 9 20 27 27
2050 5 7 7 16 21 20
Table vi - Transport efficiency (g CO
2
/tonne-mile) improvement associated with the different
ship types using scenario B2-4/A1B-4

.6 The impact of the waiver clause in Regulation 19.5 is estimated to be low
on total emissions reduction potential due to EEDI. A change of waiver
level from 5% to 30% will result in a decrease in CO
2
reduction levels by 7
million tonnes per year in 2030 (overall reduction is 416 million tonnes for
this scenario).
- 21 -


.7 Based on the analysis provided in this appendix, it is concluded that the
likelihood of Flag States or shipowners to opt for an EEDI waiver is low due
to low compliance costs and commercial disadvantage of non-compliance.
Accordingly, the level waiver uptake level taken in this Study as 5% (low)
and 30% (high) is regarded as reasonable. It is most likely that waiver will
be at the level of 5% as current indications imply.

.8 Implementation of SEEMP-related energy efficiency measures are
generally cost effective; however, it is likely that adoption of these
measures will need to be stimulated. Follow-on monitoring and audits, and
high carbon and fuel prices are expected to play a role in driving uptake of
SEEMP efficiency measures. Although it is not anticipated to have a target-
based regulatory framework for SEEMP in the foreseeable future; putting in
place an effective audit/monitoring system, building awareness and
resolving split incentive issues on operational energy efficiency measures
will facilitate enhanced uptake of SEEMP measures in the world fleet.























Table vii Technologies for EEDI reductions and SEEMP related measures

.9 The mandatory use of SEEMP based on current IMO Regulations will
provide a procedural framework for shipping companies to recognise the
importance of the operational energy saving activities. It will significantly
boost the level of awareness and, if implemented properly, will lead to a
positive cultural change. However, and in view of lack of regulatory
requirements for target setting and monitoring, SEEMP effectiveness will
need to be stimulated / incentivised via other initiatives.

.10 To make the application of SEEMP more effective and to prepare the
shipping industry for likely future carbon pricing via MBMs, it seems that
use of the EEOI (Energy Efficiency Operational Indicator) or a similar
performance indicator should be encouraged or mandated. This will involve
EEDI reduction measure Energy Efficiency Measure
1 Optimised hull dimensions and form Engine tuning and monitoring
2 Lightweight construction Hull condition
3 Hull coating Propeller condition
4 Hull air lubrication system Reduced auxiliary power
5 Optimisation of propeller-hull
interface and flow devices Speed reduction (operation)
6 Contra-rotating propeller Trim/draft
7 Engine efficiency improvement Voyage execution
8 Waste heat recovery Weather routing
9 Gas fuelled (LNG) Advanced hull coating
10 Hybrid electric power and propulsion
concepts
Propeller upgrade and aft body flow
devices
11 Reducing on-board power demand
(auxiliary system and hotel loads).

12 Variable speed drive for pumps,
fans, etc.

13 Wind power (sail, wind engine, etc.)
14 Solar power
15 Design speed reduction (new builds)
- 22 -

more accurate and verifiable measurement of fuel consumption that could
pave the way for CO
2
foot printing and data verification in the future.

.11 The estimated reductions in CO
2
emissions, for combined EEDI and
SEEMP, from the world fleet translate into a significant average annual fuel
cost saving of about US$50 billion in 2020 and about US$200 billion by
2030; using fuel price increase scenarios that take into account the switch
to low sulphur fuel in 2020.

.12 Investigations show that ship hydrodynamic and main engine optimisation
will bring about energy saving opportunities of up to about 10% with no
significant additional cost of shipbuilding. In addition, the main and auxiliary
engines are already available with reduced specific fuel consumption of
about 10% below the values used in the reference line calculations. The
above two combined effects is indicative that cost of compliance, for an
average ship, to phases 0 and 1 will not be significant. As a consequence
of current developments in ship design and new technologies coming onto
market, the cost of EEDI compliance in phase 1 seems to be marginal as
the 10% reduction requirement may be achieved by low-cost hull form
design and main engine optimisations. Cost of compliance for phase 2 and
phase 3 may be higher and will involve some design-speed reduction for an
average ship. However, the overall life-cycle fuel economy of the new ships
will be positive as indicated by the high savings in fuel costs.

.13 Despite the significant CO
2
emission reduction potential resulting from
EEDI and SEEMP regulations, an absolute reduction in total CO
2
emissions
for shipping from the 2010 level appears not to be feasible using these two
measures alone. For all scenarios, the projected growth in world trade
outweighs the achieved emission reduction using EEDI and SEEMP, giving
an upward trend, albeit at a very much reduced rate compared to BAU.





















Figure iii World fleet CO
2
level projections (average of A1B-4 and B2-1 scenarios)


______________